MATHURADAS KANJI Vs. LABOUR APPELLATE TRIBUNAL

JUDGEMENT

(1.) This appeal by Special Leave is directed against the decision and Order of the Labour Appellate Tribunal of India. Bombay, dated 18-5-1955, modifying the Order of the Industrial Tribunal dated 31-8-1953. The appellants were Government contractors for clearing and transporting of imported foodgrains. They entered into three agreements with the Government - the first and the second appellants on 5-2-1952 and the third appellant on 1-11-1951 - for clearing the cargo at prescribed rates. The three agreements contained similar terms. The said agreements provided that if the rate of discharge on a ship exceeded 1,500 tons per 24 hours and no shed demurrage was incurred, the Government was liable to pay to the appellants remuneration at the prescribed rates plus a bonus of As. 4/- per ton, and if the rate of discharge fell below 900 tons per 24 hours or shed demurrage was incurred Government was liable to pay to the appellants remuneration at the prescribed rates less As 8/- per ton. The appellants, for the purpose of carrying out their part of the contracts, employed workmen through muccadums (i.e., gang leaders) on piece rate basis for the purpose of clearing, filing and handling foodgrains, flour and other foodstuffs and loading the same for transport. The total number of workmen employed for the said purpose aggregated to about 2,500 and the appellants carried out the work in three shifts. In March 1952, disputes arose between the appellants 1 and 2 and the workmen employed by them. The second and the third respondents, two unions representing the workmen, demanded for an increase in wages and also put forward a claim for payment of bonus of As. 4/- per ton which the appellants might receive from the Government. On 24-3-1952, a settlement was arrived at between the appellants 1 and 2 and the workmen, in and by which the said appellants agreed to pay to the workmen, with effect from 25-3-1952, wages which were considerably higher than the wages which the appellants 1 and 2 were paying before. Though the third appellants were not a party to the said settlement, they also paid the increased wages to the workmen employed by them. The settlement, however did not cover the claim of the workers to the bonus of As. 4 per ton. As the dispute to that extent was not settled, the Central Government, holding that an Industrial Dispute existed between the appellants and the respondents regarding payment of incentive bonus', referred the said dispute for adjudication to the Industrial Tribunal consisting of Shri S. H. Naik as the sole member. The Industrial Tribunal held, mainly on the basis of a letter written by the Government in September, 1951, that the intention of the Government in granting a bonus of As. 4/- per ton to the appellants was that they should pass it on to the labour. It also sustained the claim on equitable considerations, namely, that the employees, who were all temporary workmen, not entitled to gratuity, Provident Fund and other benefits, should get incentive bonus, when dock workers in the Port Trust and stevedore workers under the Dock Labour Board were getting it. On those grounds, among others, the Tribunal directed the appellants to pay to the workmen concerned incentive bonus referred to in Clause 7(2) of the agreements with effect from 1st November, 1951, and further directed that the arrears should be paid within two months from the date on which the award became enforceable. The appellants carried the matter by way of appeal to the Labour Appellate Tribunal of India. The said Appellate Tribunal, on the materials placed before them, held that in the agreements entered into between the Government and the appellants there was no term to the effect that the bonus of As 4/- per ton was to be passed on to the labour concerned in the work. But, having regard to all the circumstances of the case they were of the view that whatever might have been the strict legal rights of the workmen to the said incentive bonus of As 4 per ton, it was an addition which they in justice ought to share with the labour, provided the labour had helped them in earning the incentive bonus. They expressed the view that the workmen could claim 45 per cent. of the incentive bonus received by the appellants from the Government, but that was subject to the deduction of such penalties as the Government, might have imposed or might impose on the contractors for which penalties the workmen was directly responsible. They also evolved a procedure for the disbursement of the employees' share of the bonus in the following manner:

(2.) The learned Attorney-General, appearing for the appellants, contended that the workmen have no claim to a share in the bonus under the terms of the agreements entered into by the appellants with the Government, and that apart, the respondents were not entitled to any bonus as the necessary condition giving rise to a claim for bonus, namely, that the business should have made profits, was neither pleaded nor established before the Tribunal. The first question turns upon the terms of the agreements. The three agreements are couched in similar terms. It would therefore, be sufficient if we consider the terms of Exhibit 'A', the agreement that was entered into between the Union of India and the first appellant. The agreement was only between the Union of India and the first appellant and the workmen were not parties to it. The appellants entered into separate agreements with the workmen through muccadums on piece rate basis. Clause 7 of the agreement dealt with remuneration. It provided for the payment of remuneration to the first appellant at specified rates per ten tons in respect of grains arriving in bulk or loose and for grains arriving in bags. Note 2 to the said Clause of the agreement on the basis of which rival contentions were advanced read as follows:

(3.) The next question is whether the workmen are entitled to claim incentive bonus de hors the agreements. The Appellate Tribunal gave to the workmen a share of the bonus earned by the appellants under the terms of the agreement on the ground that social justice required that the employees, who were all piece rate workers, and had no steady and continuous flow of income and not entitled to gratuity, provident fund and other benefits, should get a share in the incentive bonus. The learned Attorney-General contended that the respondents claimed bonus only under the terms of the agreement entered into between the Central Government and the appellants and therefore the Tribunal was not justified in giving relief to them on a different basis. He further argued that the workmen were not entitled to bonus, whether incentive or otherwise, unless the appellants' business made profits, and in this case there was neither an allegation much less proof that the appellants made profits during the years in question.